tv Meet the Presss Press Pass NBC January 29, 2012 11:30am-11:45am EST
>> i'm david gregory. this is "press pass." richard, the head of the recently created watchdog agency aiming to protect americans from predatory loans and mortgages, his appointment by president obama during congress' winter recess infuriated republicans who blocked his nomination for months. it's a flash point in the struggle between the white house and gop over government oversight in the new economy and in this election year. director, welcome. >> thank you. >> good to have you here. difficult circumstances under which to be appointed and to take over the job. i want to start with the job. what protection are you providing consumers, americans, that they didn't have before?
>> there is quite a lot that we're doing, david. we started immediately upon my becoming director supervision program over nonbanks which includes a lot of mortgage brokers, mortgage servicers that we heard about, payday lenders. we have the ability to go into those institutions, examine their books, ask them tough questions, really get their model and to fix problems that we see in terms of whether they're complying with the law. that's an important protection for the public. >> what about some of the -- i think about the gse, fannie mae, freddie mac, the fact that they were already regulated even though the government is now charging some of the figures involved there. what can you provide now that wasn't in place then and is this a matter of certain fly by night operators outsmarting the government and what will make that possible to do now? >> number one, we had the mortgage market and run-up to
the financial crisis and regulating some participants in the market and not regulating others. you can't have a margaret where some are regulated and others are not and bad practices drive out good that led to fraudulent loans and all of these terrible loans where income was falsified, assets were falsified, lots of scams and fraud in that market. leveling the playing field is important. the other thing is that the enforcement and the accountability was not what it should have been in some of these markets even where there was supposedly regulation and nobody looking out for consumers. nobody had that singular focus which is what this agency is about. i think it's going to contribute both to protecting consumers, to supporti inin ining responsible businesses. >> it's a power grab. an executive agency that now has this the authority under guise of protection, what's wrong with that system? >> when you set up the agency from scratch, it's a humbling
experience. you don't feel you're a powerful figure because you are dealing with a lot of things to get to the point where you can do your job. the other thing is the markets here are large. we're talking about a $20 trillion consumer credit market when you add up mortgages, credit card, student loans and the like. we need to have someone who is focused on that. we need to have someone payin i aattention to how that affects americans. we're talking about those who struggle that are confused and led astray and sometimes make bad decisions. if we can get these markets to work better, with he can get things simpler and clearer for consumers to make more informed choice, it's a good thing. ink everybody recognizes that. >> what about personal responsibility? there's no question that the financial collapse in part was driven by people thinking it was a good idea to get a loan from a bank and some other lender that was well in excess what they could afford to pay or even service as a loan.
>> i agree with that. i think there are a lot of offers where they are offered cash back and blinds them and makes bad decisions. people need to live with their decisions and they take responsibility for them. we can make the markets work better. we drive out fraudulent practices and make prices and risks clear for consumers and focus on financial literacy and helping people understand what they need to do to be responsible citizens to do a r better job. it doesn't help society if they make a wreck of their lives and they destroy their own dreams. nobody wants that. if markets work better, it would be good for america. >> why is it that government thinks it can actually get in the middle of this and start regulating markets. we have so many layers of financial regulation that was not up to the job. you had financial operators on wall street at companies like aig who frankly knew more than the regulators did who were inventing products that they even failed to grasp or understand and the government was way, way behind so can't you
understand those who have a problem with government coming in thinking now we'll be able to write this and now we'll be able to protect consumers? >> we have a market that got broken on its own leading up to 2008 it destroyed the economy. millions of people lost jobs and lost homes. often through no fault of their own just because these were the circumstances that occur when you have such a gross economic dislocation and defining click moment of our lifetimes. nobody was focused on consumers. nobody was focused on how these markets affected people in their daily lives for consumer credit, for mortgages, for student loans. with very that in bureau. it's a good thing. i think if we do our job well it will make a difference and improve the lives of americans and if we had this bureau in pla place ten years ago, we would have seen coming a lot of problems that emerged am mortgage markets. they were allowed to fester and grow and overwhelmed the system. that surprised a lot of people.
it won't be a surprise next time. >> we'll have more after this break with the new consumer watchdog for the obama administration once a contestant on a big-time game show. we'll tell you about it after this. you're at the grocery store. bon appetite. soon, almost every device will connect through the internet. it's going to require more speed, capacity, and constant improvement. america's broadband companies are investing billions in technology to make it all possible. i hate when he does that.
was a big fan of the president and who is no longer who is questioning the cumulative affect of new government regulation over the financial sector. he's obviously operating an com bank. how do you interact with him? this is what we're trying to protect and we can work together or against you. >> i've had conversations with jamie dimon it's part of my job to reach out for input from all sides. it's not an easy thing to run a large bank of tens of thousands of employees in a lot of different markets as you just described. at the same time, businesses need to understand that they need to treat their customers fairly and they need to treat them on a sustainable basis and that's something that's important to get across. i think most of the leaders of our businesses are sympathetic to that. they understand that. they want to be responsible
businesses. they intend to be law abiding businesses and that's something we will work with them on. >> what specifically are you going in there saying that you need to address? or that you're trying to protect consumers against. >> there is a number of things. things we talked about in the mortgage market. trying to simplify credit card forms so people make better choices there there's a variety of things. there's also things that go to nonbanks. areas where consumers have been exploited and those things need to be cleaned up. some areas where there's a lot of fraud. >> what about bank fees? would you threaten some kind of consequences if you felt the consumer was being unfairly targeted? >> we don't have authority under the law to set prices or to set interest rates per se. that's something the market should work on back and forth. in that situation the market worked extremely well. the fee was very transparent. customers spoke up and said spoke out. there was a dialogue back and north between the providers and
not just bank of america but others and their customers and the issue was resolved. it's important in any marketplace you have a buyer and sell v seller. consumers need to speak up for themselves and make clear they can always go to another provider, that's something that came up in this situation. that will help the markets to work. >> when you talk about real consequences, what will the agency be able to do? what will it seek to do to enforce laws and what kind of consequences are we talking about? >> two things in particular. i spoke earlier about our ability to go in and examine these institutions with a focus on consumer protection which is something that really did not occur before at all. certainly not at the federal level and only sporadically at the state level. the second thing is we have the authority to enforce the law. if people are not abiding by the law, if they are seeking a financial advantage by violating the law, if they are taking advantage of their customers treating them unfairly or deceptively as sometimes has happened, we have the authority
to make that right. if we need to go to court to do it, we will. if we do administrative procedures we will. if we work to banks to fix problems, we'll do that. >> so you have the presidential candidates on the republican said saying we have to undo dodd frank. it's a new layer of financial regulations for banks primarily meant to avoid the kind of problems that we saw in 2008. but they would certainly do away with the kind of consumer protection you are talking about. make the case specifically in a real world way why you have to exist and why this agency has to be sustained beyond the obama administration? >> there's no question these markets did not work leading up to the financial crisis. we all were hurt by that. we need to think carefully about how we prevent that the next time. part of it is that people are in the financial marketplace every day. it's a confusing complicated
place. and they can be easily led to make bad decisions or they can make bad decisions. if we make that market work better, more simply more clearly for bepeople, it's a good thing. we need to access credit to make our lives work to borrow money for education or a house and convenience of credit cards and our lives is an important part of life. it's made our lives better. it can make our lives worse and we saw some of that running up to the financial crisis and our job is to fix that. >> are you confident that republicans or other allies will not undo this appointment under the circumstances in which it was made? >> what i know is i'm now the director of this bureau. it's a very important job. we have a lot of work to do. we'll go forward and do it i was in talking to the house oversight committee this week. we had a good exchange. they had thoughts with me that we'll go back and implement and thoughts for them about the job we're doing.